Tax profiteering corporates to help with the cost of living, says UK civil society<\/p>\n
26 March, London \u2013 40 Leading UK civil society organisations and unions have called on the Chancellor to levy excess profits taxes on the windfall revenues numerous sectors are predicted to make as a result of the economic fallout from the US-Israeli war on Iran.<\/p>\n
The organisations involved \u2013 including National Education Union, Tax Justice UK, Greenpeace UK, 38 Degrees, Global Witness, Women\u2019s Budget Group and Patriotic Millionaires UK \u2013 have written a joint letter to Keir Starmer and Rachel Reeves urging the government to curb profiteering. They propose the tax revenue is used to provide direct cost of living support, and investment in the long-term resilience of the UK economy to make it less susceptible to fuel price shocks.<\/p>\n
The signatories say that the Iran war crisis should be a \u201cturning point for the UK\u201d as \u201cenergy bills, fuel costs, and essentials are set to increase in costs for households and businesses already struggling with affordability after years of a cost of living crisis\u201d. The letter goes on to say that \u201cIt is not right that extraordinary profits, generated off the backs of ordinary people during periods of crisis, are siphoned off into private hands and corporate bank accounts.\u201d While it also notes that the government\u2019s own cost of living champion has called for<\/a> measures to prevent profiteering.<\/p>\n Faiza Shaheen, Executive Director of Tax Justice UK who coordinated the letter said:<\/p>\n \u201cToo often UK governments have failed to protect households and small businesses from the profiteering corporates and super-rich individuals who circle around crises like vultures. Spain has already frozen rents, yet our government fails to show urgency. The Chancellor needs to get a grip on the situation to help people already struggling, and show that this will not be yet another crisis where the rich get richer, while everyone else foots the bill.\u201d<\/p>\n New data<\/a> recently released suggests that North Sea energy firms are already set to make extra profits while banks and mortgage providers will increase revenue as a result of increased mortgage costs<\/a>. Meanwhile, costs for agricultural inputs have risen extraordinarily<\/a>, while defense contractors have recently been posting record revenues.<\/p>\n Areeba Hamid, Co-Executive Director of Greenpeace UK, said:<\/p>\n \u201cThe oil-majors are set to make gargantuan profits from global instability while ordinary people pay the price of Trump\u2019s war in Iran. Calls to scrap the windfall tax early are not just misguided\u2014they are a slap in the face to people struggling with rising energy costs, and more drilling in UK waters won\u2019t cut bills or protect UK households. The fossil fuel industry should be contributing more tax, not less\u201c<\/p>\n The policies put forward by the organisations are a strengthening of the existing energy profits levy on North Sea oil and gas companies, alongside a new levy on UK bank profits made from the British public. Additionally, excess profits taxes are specifically called for on industries such as defense, big agribusiness, and associated artificial intelligence and big tech firms which are predicted to make bumper profits as a direct result of the war on Iran.<\/p>\n Simon Francis, Coordinator, of End Fuel Poverty Coalition, said:<\/p>\n \u201cGas prices have more than doubled since late February, and households are already struggling with energy bills that have been stuck at elevated levels for five years. The latest global disruption is a stark reminder of the cost of our dependence on imported fossil fuels. Every time conflict or instability strikes overseas, ordinary households pay the price through their energy bills.<\/p>\n The Government must act urgently to protect households from the impact of rising prices and ensure that the billions in excess profits energy companies are making during this crisis are redirected to support the people who need it most. Wiping out household energy debt, strengthening the Warm Home Discount and accelerating investment in home insulation would all help cushion the blow.\u201d<\/p>\n The letter notes that previous moments, like the Covid-19 pandemic and invasion of Ukraine, \u201csaw the wealthiest households and super-rich amass even greater fortunes<\/a> \u2013 to the tune of hundreds of billions of pounds, while millions were left struggling.\u201d Research from Unite the Union found<\/a> that pre-tax profit margins were 30% higher on average in 2022 compared with the average across 2018 and 2019. Post-tax margins were on average 20% higher.<\/p>\n Conor O\u2019Shea, Campaign Coordinator, of Cost of Living Action said:<\/p>\n \u201cThe Prime Minister, Chancellor, Energy Secretary and the Government\u2019s cost of living champion have all pledged that profiteering will not be tolerated during this crisis. Those words must now be matched by decisive action. It is simply unacceptable that some individuals and corporations are getting richer off the backs of households struggling with rising bills. A tax on excess profits is a fair and necessary step to rein in corporate greed and prevent the cost of essentials from spiralling further.\u201d<\/p>\n [Ends]<\/p>\n Notes to editors:<\/p>\n Contact \u2013 Jake Woodier, Deputy Director at Tax Justice UK on 07503 789994 or jake@taxjustice.uk<\/a><\/p>\n The full letter and list of signatories can be found here<\/a>.\u00a0<\/p>\n Tax Justice UK<\/a> is one of the country\u2019s leading campaigning and advocacy organisations working to bring about progressive tax reform. We campaign for a fairer tax system that takes more from the very wealthy and actively redistributes wealth to tackle inequality; that funds high quality public services that we all rely on; and raises money to tackle climate change and doesn\u2019t subsidise environmentally destructive business.<\/p>\n The Energy Profits Levy, introduced as a \u2018windfall tax\u2019 on fossil fuel companies pumping oil and gas in the North Sea, has generated billions of pounds in revenue to the Treasury in the years since 2022. In 2022\/23 revenues were<\/a> (non seasonally adjusted) ~\u00a34.25bn, and in 2023\/24 ~\u00a33.19bn. In the period since, the cost of oil and gas has reduced, therefore the tax outturn is lower in comparison to previous years. Total revenue since June 2022 stands at ~\u00a312.198bn.<\/p>\n